Here's What the World's Oldest Investor Is Buying
Every quarter, many money managers have to disclose what they've bought and sold. Their latest moves can shine a bright light on smart stock picks.
Today let's look at the Kahn Brothers hedge fund company, co-founded by Irving Kahn, who at age 106 has yet to retire. (If you respect the Chartered Financial Analyst, or CFA, designation as a sign that someone has studied stocks intensely and has passed a tough series of exams, know that Kahn was one of the first to ever earn the credential.) Kahn founded the company in 1978 with two of his brothers. Its total portfolio was valued at $509 million as of Dec. 31, 2011.
The fund's top holding is Pfizer (NYS: PFE) , which represents about 11% of the overall portfolio.
So what does Kahn Brothers' latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include controversial agricultural company Monsanto (NYS: MON) . It's frequently under fire for its genetically modified seeds and its pesticide and herbicide businesses, but with the world population growing and more bellies grumbling, farmers will likely keep aiming to boost their production. That means seeds designed to resist bugs and droughts and to offer big yields will be of interest. Monsanto is also finding success through expansion -- into Latin America, for example.
Among holdings in which Kahn Brothers increased its stake were Medco Health Solutions (NYS: MHS) and Citigroup. Medco Health Solutions is in the process of trying to merge with Express Scripts. If the deal goes through (it was recently valued at $29 billion), then the new entity will control about a third of the pharmacy benefits management business. The merger may be nixed by the FTC, though, and more than a few states are looking into the deal and considering legal action to stop it. Banking giant Citigroup has been restructuring some, slimming down and also investing in developing economies with good growth potential. But it has also been dismaying many investors, and even failed part of the Fed's stress test.
Kahn Brothers reduced its stake in a lot of companies, including IBM (NYS: IBM) and Bristol-Myers Squibb (NYS: BMY) . IBM has many fans these days, as the well-run company has averaged 19% annual gains over the past five years and 13.6% over the past 20. New CEO Virginia Rometty has reported that the company remains on track, innovating in many areas, such as cloud computing and data storage. Bristol-Myers Squibb, one of "5 Companies You Can Buy Today," has been posting some strong numbers, but investors need to remember that its Plavix drug will soon be facing generic competition. Still, the company has a solid pipeline of new treatments in development, and will soon hear if an anticoagulant will receive FDA approval.
Finally, Kahn Brothers unloaded nearly its entire stake in CTM Media, a distributor of print and online advertising and information in North American tourist markets that was spun off by IDT a few years ago.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing, and 13F forms can be great places to find intriguing candidates for our portfolios.
If you're intrigued by the potential of banking companies but don't have enough faith in Citigroup, check out our special free report, "The Stocks Only the Smartest Investors Are Buying," to learn about some more compelling banking stocks.
At the time this article was published LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter, holds no position in any company mentioned.Click hereto see her holdings and a short bio. The Motley Fool owns shares of Citigroup.Motley Fool newsletter serviceshave recommended buying shares of Medco Health Solutions and Pfizer, along with creating a synthetic long position in Monsanto. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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